Any apprehension that judicial process would take time is ill-founded. The matter is slated for hearing by the SC this month itself. While, presenting the budget for 2015-16, Union Finance Minister Arun Jaitley had announced the government’s decision not to levy minimum alternate tax [MAT] on capital gains made by foreign portfolio investors [FPIs] from investment in securities from April 1, 2015. In his speech, he had proposed to rationalise MAT provisions for FPIs whereby profits corresponding to their income from capital gains on transactions in securities, which are taxed at a lower rate, would not be subject to MAT. Since the exemption was intended to be applicable only prospectively from financial year 2015-16, the income tax department served show -cause...
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Category: Regulatory environment
MAT on FPIs – government must not override judicial process
While, presenting the budget for 2015-16, finance minister, Arun Jaitely had announced government’s decision not to levy minimum alternate tax [MAT] on capital gains made by foreign portfolio investors [FPIs] from investment in securities from April 1, 2015. In his speech, Jaitley had proposed to rationalize MAT provisions for FPIs whereby profits corresponding to their income from capital gains on transactions in securities, which are taxed at a lower rate, would not be subject to MAT. Since, the exemption was intended to be applicable only prospectively from financial year 2015-16, the Income Tax [I-T] department served show cause notices on FPIs for the ‘untaxed gains’ made for previous years. This led to flutter amongst foreign investors who felt this was...
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Unshackle PSBs via shedding majority control
For generations, public sector banks [PSBs] have been used by the political establishment with impunity to appease their constituencies viz., waiving farm loans especially at the time of elections; salvaging state electricity boards [SEBs] who are made to supply power at throw away tariffs or even free in some states; granting loans to favoured industrial houses without carrying out due diligence and allowing wilful default by certain borrowers [involving quid pro quo] which are clear acts of corruption. All such exogenous imposed actions in total disregard of financial prudence have led to proliferating non-performing assets [NPAs] – a sophisticated nomenclature for bad loans or in simple terms, money lent which cannot be recovered. Together with restructured assets [these are also...
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Stepping on economic independence – Modi’s report card
Commentators across a wide spectrum have felt that prime minister N Modi speech on the 69th Independence Day was stereotyped, lacking in new ideas and did not cover a number of important issues such as foreign relations, relation with neighbouring countries [especially Pakistan], terrorism, internal governance, cooperative federalism, conduct of business in parliament and so on. Some have gone that far to say that the entire 85 minutes address was an extrapolation of his “Mann Ki Baat” [a few have branded this as an exercise in self-adulation]. These are perceptions of all those who for decades have got used to stereotyped addresses from prime ministers who technically though represent the people of India but in their dispositions behave like aliens,...
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Fix coal, fix the economy
If, a person has a vision, chases it with missionary zeal and a robust action plan driven by an apt strategy mix, he is bound to achieve success. Luckily, at this critical juncture when India needs accelerated growth to fulfill the aspirations of millions of unemployed youth and the poor, we have a prime minister in N Modi who embodies all these qualities. The manner in which he has addressed the challenges facing the coal sector proves the point. The position is best encapsulated in a cryptic observation [Anil Swarup, secretary, ministry of coal recapitulated] Modi had made to him 9 months ago when he took charge of the department. Hon’ble prime minister had said “Fix coal, fix the economy”. What...
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Climb-down on Land bill [2015] – blow to development
Nearly 13 months ago on June 26, 2014, central government had convened a meeting of all state chief ministers where almost all of them had expressed serious reservations over the “Consent” and “Social Impact Assessment [SIA]” clauses in the Land Acquisition and Rehabilitation & Resettlement [LARR] Act passed in 2013. They felt that these two clauses were major stumbling blocs in the way of acquiring land for development and infrastructure projects and pressed for necessary amendment in LARR [2013]. Modi – government which had taken charge only a month back [having got a resounding mandate to deliver on its development agenda] responded positively. It came up with amendments to exempt 5 critical areas viz., defence, rural infrastructure [including electrification], affordable...
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Land bill – legal conundrum
Thus far, Congress and other like minded opposition parties have leveraged the vulnerability of ruling BJP in Rajya Sabha [where the latter is in minority] to stall the land bill brought by Modi – government that seeks to amend the Land Acquisition Act [LAA] [2013] by exempting projects in 5 crucial areas of ‘strategic’ importance like defence or critical to development from “Consent” and “Social Impact Assessment [SIA]” clauses. Faced with a stalemate, in a recent meeting of the NITI [National Institution of Transforming India] Aayog Governing Council [GC], chief ministers of the BJP ruled states proposed that the state governments may enact their own legislation suiting their requirements. The central government concurred this being a pragmatic approach as individual...
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Unburden judiciary, boost revenue
Time and again, top brass in the government has lamented at the woefully inadequate infrastructure at all layers in the judicial hierarchy vis-a-vis the ‘mindboggling’ number of pending cases [and still ever increasing]. Accordingly, the ministry of law justice and company affairs has asked the Supreme Court [SC] and all High Courts to fill existing vacant positions besides increasing the bench strength to fill the void. But, has the government ever bothered to examine as to why the cases have proliferated? In how many cases, the state or any of its organizations are involved? Could the authorities have prevented cases from moving to court? Is a maze of ambiguous laws and rules/regulations alone responsible for this? Or is there something...
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Development on ‘leased’ land – a dangerous idea
Even while the provisions of the Land Acquisition Act [LAA] brought by the then UPA – government in 2013 were being debated, some sections including chief ministers from Congress ruled states had expressed serious concerns over its efficacy in ensuring smooth acquisition of land. After the Act came in to force from January 1, 2014, those apprehensions came true as during the 18 months since then, only a few hundred acres of land has been acquired. Meanwhile, in a meeting convened by Nitin Gadkari [then in charge of rural development ministry] on June 26, 2014, majority of the states and union territories including from Congress ruled states viz., Karnataka, Kerala, Maharashtra and Haryana had pressed for deletion of the “consent”...
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Illicit funds in foreign accounts – noose tightened
Not long ago, Indian residents fancied the idea of opening a foreign bank account [FBA] in the so called tax haven jurisdictions viz., Switzerland, Cayman Islands, Lichtenstein, British Virgin Islands et al. An FBA offered a convenient opportunity to the tax evader transfer his illicit wealth and income generated in India. It was considered to be a status symbol too. During the last 10 years, such accounts and the money lying therein proliferated as on one hand, the policy and regulatory environment here in India enabled generation of illicit wealth at a rapid pace [shall we say,‘push’] and on the other, the ‘secrecy laws’ in aforementioned jurisdictions provided a shield – or shall we say a China wall that no...
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